Higher education is expensive. Most students cannot afford school without grants or scholarships, both of which are scarce -- especially in developing countries. The good news is that more students are prepared for and interested in pursuing advanced degrees than ever before. The bad news is that financing education on credit is hard:
- Student loans require long terms and grace periods. While in school, most students are unable to work full time and make regular repayments. The opportunity cost for many financial institutions is just too high.
- Most students have no prior credit history, causing them to be perceived as high-risk borrowers.
- Young people everywhere lack collateral. This is doubly true for low-income students who are also likely to not have parents or future employers to guarantee them.
All of these factors leave behind millions of students every year, perpetuating an intergenerational cycle of poverty for families everywhere.
Loans for tuition. With access to affordable, long-term credit, more students can pay for school. And when they graduate, they’ll have the potential to earn much more than before, making it easier to repay their loans once they’re employed. Kiva is exploring student loan terms of 6 to 20 years.
Loans for supplies & living expenses. For students to succeed, they need credit for laptops, uniforms, books and more. Providing flexible capital for these supplies helps students focus on school and become more employable in modern economies.
Abaarso School of Science and Technology, Somalia
Loans to provide partial tuition loans to some of Somaliland’s brightest high school students who could not afford to attend school.
African Leadership Academy
South Africa Loans for laptops to help highly-qualified high school students connect to the digital economy.
The American University of Central Asia (AUCA), Kyrgyzstan
Loans to supplement the financial aid packages offered to students in Kyrgyzstan.
Campaign for Female Education (CAMFED), Zimbabwe
Loans to help women in rural Zimbabwe expand their businesses and help young girls access quality education.
Colombia Long-term tuition loans for low-income students to go to vocational school.
Colombia Loans for students to afford applications to attend top post-graduate programs around the world.
Honduran Foundation for Educational Loans (CREHO), Honduras
Loans to cover tuition costs, including enrollment at technical and vocational schools and universities for undergraduate, master’s, and doctoral programs in Honduras.
Loans with flexible rates and terms for Bolivian students who could not otherwise attend university due to financial constraints.
Loans to help students from low-income families pay their tuition through future income contracts in Chile.
Maharishi Education for Invincibility Trust
South Africa Long-term tuition loans for quality vocational and distance learning.
Loans to help alleviate education costs such as textbooks and tuition fees for students in Bolivia.
Student loans for low-income students at the maritime academy and YSBS’ vocational schools in Indonesia.
What is Success?
We want to help build a student loan market that enables capable students to thrive. We define success as:
- Increased Enrollment: More students with the credentials enrolling in universities, vocational schools and training programs. And in time, new generations of high wage earners and ethically-driven leaders emerge across sectors.
- High Repayment Rates: Students able to earn enough money upon graduation to repay their loans.
- Strong Credit Histories: Students establishing good credit through regular repayment on loans, setting them up for financial success later in life.
- Demonstration Effect: Proof that students are viable long-term investments so that traditional financial institutions start funding student loan programs.